Thursday, June 16, 2005

Social Security thoughts

There has been much discussion about the viability of our Social Security system. One question that continually comes to mind is the so-called S.S. Trust fund. This fund is filled to the brim with U.S. Treasury bonds redeemable when needed. My question is how can we redeem them for cash when the currency backing them has been spent by Congress?
The bonds are backed by the "full faith" etc of the U.S. government but where is the cash to accomplish this miracle? We certainly don't have enough gold reserves to back them. The cash must come from either the American public (increased taxes)or from the government printing presses (inflation). It would be useful if some knowledgeable economist could explain this process in terms that the average American can understand.
Too many people are taking the viability of S.S. as gospel faith, it ain't folks. The System is truly hurting and no one wants the medicine that is required. The mention of unredeemable Treasury bonds is a no-no in political circles. But then, we all should know that politicians are experts in running in circles.


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